Are Conservative Catholics Abandoning Capitalism?

Francis Fukuyama bears a heavy burden: He wrote the most premature obituary in history. He declared the end of the Cold War marked “the end of history,” ushering in a new era of unopposed democratic capitalism.

Two decades later, capitalism faces challenges from within the Church. The highest levels of the hierarchy express skepticism about the free market. Most recently, a debate over collectivism flared between the Acton Institute and writers for the magazine First Things.

Founded by the late Fr. Richard John Neuhaus, a critical but vocal supporter of the free market, First Things’s current literary editor calls himself a “socialist Roman Catholic.” Its pages describe wealth itself as “an intrinsic evil.” And editor Rusty Reno has writtenextensively about the need to curtail markets.

The disagreement comes over a prudential issue, between faithful Catholics in agreement over much else. It culminated in two public debates between Acton’s founder, Fr. Robert Sirico, and Reno. (You may watch the debates online in their entirety here and here.)

I’ve been asked to present both sides of the argument without taking sides – not even with my employer – and let the reader decide which is correct. I hope each side will recognize this as an accurate, if incomplete, summary of their position.

Catholic critics of the free market are often influenced by the writings of G.K. Chesterton, E.F. Schumacher, or Dorothy Day. They frequently consider themselves distributists, favoring the small and local. They believe that private property should be widely diffused throughout society, and government should break up concentrations of wealth.

Further, Reno warns that neoliberalism erodes civic engagement and traditional morality. It even poses a spiritual danger, enhancing the soul’s rebellious attraction to “gnosticism” and “antinomianism.” Market choices give the impression that everything, including gender identity, may be selected at will. Political correctness, he wrote, “dovetails frighteningly well” with capitalism.

The triumph of capitalism gave rise, Reno says, to a “globalized oligarchy” that “champions” free trade and degrades the middle class. To preserve middle class economic and political power, “We need policies that favor small and mid-size companies … We should consider progressive corporate taxes” and grant “competitive advantages” to “local companies … against gigantic global corporations.”

Reno also called for the state to “restore Sabbath laws,” and tax university endowments and internet commerce. These steps will enhance solidarity and allow citizens to focus on higher things.

Defenders of the free market frequently quote Michael Novak and Fr. Neuhaus, as well as the Austrian school of economics. They believe the free market reflects the belief that human nature was “made for freedom.” It best unleashes human creativity and creates unprecedented wealth that has lifted billions out of poverty.

Elites favor crony capitalism, not the free market, they say. Government intervention favors the powerful and politically connected. The crisscrossing ties between corporate boards and government regulatory bodies forms a Lilliputian lasso that strangles the free market.

Increasing government power merely hands the powerful and politically connected more rope. Turning first to government violates subsidiarity.

Moreover, governments have proven hostile to a free and virtuous society. Reno’s social vision “will require a class of managers to assure that the social engineering is being implemented,” Fr. Sirico said. Reno “thinks that he is going to be on the Politburo,” but these positions are typically filled by people hostile to traditional values.

“At this moment, when the moral tie is weakening in our society, you’re going to expand the political – as though the political class is somehow immaculately conceived? As though they’re not part of this moral erosion?” he asked. “I think this is dangerous on a very practical level.”

Their debate reflects our growing social division. A 2013 Public Religion Research Institute poll found Americans closely divided on whether capitalism is compatible with the teachings of Christ.

Since I am an employee of the Acton Institute, the reader can likely deduce my position. However, this issue is a matter of prudence guided by broad principles. To come to an informed position, each person must learn the laws of faith and economics.

Thoughtful readers must critically ponder such questions as:

Which economic systems affirm or deny that mankind is made in the image of God?

How does a given proposal fit with the whole of Catholic social teaching, especially Pope Pius XI’s statement that “no one can be at the same time a good Catholic and a true socialist” (Quadragesimo Anno)?

How does the proposed government intervention avoid the “grave evil” of violating subsidiarity?

What issues justify government intervention? At what level of government?

What form of economy encourages citizens to exercise moral discretion (diakrisis) and responsibility?

What does history tell us about this system’s economic performance and relationship to human flourishing?

What is the likelihood that the government agency I would create will be run by people who hold Judeo-Christian moral beliefs?

What would happen if the power I bestow upon government is ever wielded by aggressive secularists?

Am I living up to the full potential of my faith within the existing system, or could I do more?

Those who think these through will agree with Fr. Sirico, Rusty Reno, and the Russian dissident and prophet Aleksandr Solzhenitsyn who wrote that “the line dividing good and evil cuts through the heart of every human being.”

20 Comments

This is a great article. If I may toss in my two cents, I think one of the biggest problems we have with the American version of capitalism is that when there necessarily are winners and losers, we generally turn a blind eye to the losers. When one industry rises, another likely falls, and we seem to be quite fine with workers from declining industries being left behind. Part of this, I think, is a structural problem with the US economy; we don’t provide viable financially-stable career paths going forward for people in trades, for example. We don’t seem interested in job retraining to assist those in declining industries. Instead, in some places it seems that we vilify those who didn’t have the foresight to realize their industry was on the decline, through actions like drug testing for unemployment benefits.
We place great value as a society on the concept of work and employment, yet we don’t do much to address structures that help or hinder Americans accessing work.

Well said. We spend a fortune on research re needs for employment for the future and never share or plan with our universities or trade schools to help make the actual changes with those who will be looking for employment.
Our churches are so involved with political correctness and distribution of wealth that they are not looking at the cultural differences that exist between the people they support and help bring to my country . Some of these groups have little to no respect for women and those who do not believe in their cultures and religions. Little desire to integrate . I feel my church has abandoned my children and myself and cares little for our safety or the preservation of my religion.

Maggie, you’re exactly right. As far as employment is concerned, as someone who has a trade certificate from a vocational school (more ed. than a typical h.s. diploma) I’m having trouble finding stable work, while most persons in their 20s are whiny snowflakes with pieces of paper working part-time jobs at Starbucks (if they’re lucky). The simple formula is that there are too-many under qualified college kids and there are checks on who can sign a student loan. Back in the day college was for the really smart, while 1/2 the jobs only required a regular high school diploma. States need to legalize apprenticeships for all professions requiring a state license (not just the construction trades), which would help those who otherwise cannot afford or are not qualified to go college work. (An 18-yr. old working as a apprentice for at least the min. wage makes more than a whiny, spoiled brat college co-ed.)

As a Latin Mass Catholic I’m not liked by the episcopacy anyhow, but if Catholics from low-income families actually got financial aid to go to Catholic school (at all levels) things would be different. Maybe I wouldn’t be discriminated against by the HR yuppies for my faith?

“When one industry rises, another likely falls, and we seem to be quite fine with workers from declining industries being left behind.”

That is simply not true. That is not how the modern economy works. While there will always be some declining industries it is not true that one industry rises at the expense of another. This is akin to denying that economies can actually grow at all, and suggesting that one can only build wealth by confiscating it from another.

The great problem here is that modern Catholics are rich spoiled brats living in a time of unparalleled luxury. They do not understand the meaning of the phrase “modern economic growth,” and they are so filled with envy that even though they live lives of comfort and luxury far surpassing even their royal ancestors, they loathe their neighbors who have more than they do. They criticize capitalism without recognizing that it is only because of capitalism that they can afford to live in 2 story houses, have a car for each adult, heating/cooling, smart phones, computers, refrigerators STOCKED with food especially meat products which were historically rarely found on the poor man’s plate due to its cost, washers and dryers, microwave ovens, etc. The common man prior to capitalism did not even have a solid floor in his petty house. He did not sleep in a bed and his home lacked walls partitioning one room from another. Nor did he ever own an inch of his own land. Do you understand how incredible it is to own your own house? Despite everything we have, we simply want more, and we want it at the expense of those who have what we want. That is called envy.

I think you have misinterpreted my comment. Perhaps I should have been more specific. For example, it seems clear that with the rise in automation, jobs such as truck driving, delivery, taxi drivers/Uber drivers, etc. could be at serious risk. Many of the people in these professions do not have college and/or advanced degrees. I don’t see structures in place to make sure these people are able to make a smooth transition into something new.
Please note, though, I didn’t claim that the economy AT LARGE doesn’t grow when jobs are displaced. With all due respect, that is a claim you have inserted.

It’s hard to teach old Catholics new tricks. We all can agree that the family must take center stage and a flexible employment market is critical. Imagine a system that depends on the nonprofit sector to provide work and on the job skills training that increases in times of economic downturn. In the U.S. the non-profit sector had about the same amount of wealth as the poorer half of the population 15 years ago and today these so-called charities have ten times the wealth of the poor. Hospitals, universities, museums often serve the wealthy and pay lip service to the poor. Large endowments and fund raising occupy the Boards of Directors as half the population are so poor that only 26% of young adults will marry and most babies are aborted. Would Catholics support a tax rule that limited the charitable deduction for use with charities that agreed to use half their donations for transitional jobs and training in times of high unemployment?

A good tax system proscribes the operating rules for capitalism and a bad tax system distorts the playing field with monopolies, regulations, and tax expenditures (credits, deductions, special rates, deferrals, and exemptions). U.S. tax expenditures amount to $1.3 trillion a year with most of the money going to special interests. A better tax system would blend the three tax bases: wealth, income and consumption; in such a way that family wealth is accumulated over a lifetime, businesses that behave like good stewards are encouraged and bad stewards pay the price of their poor judgment and laziness.

Instead of taxing worker income at higher rates (15.3% payroll taxes plus income taxes) it would be far better to eliminate most tax expenditures and let a modest 8% VAT fund social security and medicare. An even fairer system would tax income and wealth inversely – optionally permitting lower income tax rates in proportion to a voluntary tax on net wealth. Families with low wealth and good stewards with high income to wealth ratios would benefit.

Growing up there was something internal to me that questioned Capitalism but I couldn’t pin point it. I always knew Socialism was wrong from what I saw implemented by Stalin, Lenin and the such. After finding GK Chesterton and learning about Distributism, I finally had my answer.

Capitalism is founded on the principles individual while Socialism is founded upon the principles of the state. Distributism is founded upon the principles of the family. Only when the family is strong is the country strong. Where are we in the world? Is the family strong? This is a definitely a no.

GK Chesterton once said that the birth of Capitalism is Socialism. Aren’t we living that right now? Communism was an extreme response to Capitalism.

Now, I suggest reading Hilaire Belloc’s “The Great Heresies”. I cannot do that justice here. One has to read it in it’s entirety. He and GK could see the ending of things from beginning ideas. The logic of Capitalism came from the Protestant Revolt. Calvin’s thought in the individual is only a logical implementation for Capitalism. And when all interpret for themselves then chaos reigns. Until Protestants unite back into the fold of the Catholic Church, we are just going to get worse in this country. Atheism is only a logical conclusion also to the Protestant result. You may not like to hear that but it’s true.

Read GK Chesterton’s “Outline of Sanity”.

Also, there is the The American Chesterton podcast called “Uncommon Sense”. They are doing a special 4 part series on Distributism and the first part is some historical reasoning that Distributism came about.

There is also “The Distributist Review” online. There was a very good article by Thomas Stork that analyzed how Distributism leads to “Free Trade” more sincerely and retains humanity dignity and not being a “wage slave” as we have in Society today.

People get PhD’s in economics and one article somewhat treating Distributism as a “throwaway” economic theory is unfair. There’s also the works of Father Heinrich Pesch. His books on economics rivals that of the Summa Theologica.

Regrettably, what Catholics have actually abandoned, including clerical administrators of the Church from the Pope to his subordinates, is genuine Catholicism. Self-centered self promotion and the promotion of humanism as a means to sanctity have taken the front seat to the actual mission of the Church which is the promotion and encouragement of the genuine selfless sanctity in the faithful which results only from communion with God. Promotion of the institution, the ritual, and good behavior have largely been the MO of the Church since the real troubles for Catholics began in the 1960;s when genuine Catholicism was largely discarded to join the rest of the world in their embrace of Secular Humanism while painting a religious face upon it. The dispositions of the Church have not changed since then. That corruption has precipitated such a volume of useless garbage in the church, which is an impediment to our salvation and to the well being of humanity, that it would not be possible to recount the volume of it here because of time and space constraints. It is a very short trip from there to the near complete cognitive and then social corruption in which we now find ourselves immersed since the loss of the personal vision of God always precipitates ignorance of the means of constructive reverence for genuine human nature. What we then end up with is a disjointed, convoluted, and morally bankrupt fabrication of it such as that unfortunately being promoted by our Pope and his subordinates, not only to Catholics but most regrettably to the world at large.

If you read the book of Ruth, you find that under the law the poor were instructed to WORK! Boaz, a good man, left grain behind in his fields for the poor to gather. Ruth was among those that gathered the grain. NOTE SHE HAD TO GATHER THE GRAIN. It was not gathered for her.

Matthew 25 Two groups of virgins gather to await the coming of the bridge groom . Each was free to choose how they would invest their money. The wise group chose to invest in extra oil for their lamps. The foolish did not. Jesus rewarded the wise and did NOT admonish them for not sharing with the unprepared fools.

Three servants were tasked with handling the master’s wealth. Two were productive one was lazy. The lazy one was cast of the kingdom. The most productive was given more to manage. THIS IS THE EXACT OPPOSITE OF SOCIALISM!

In the last third of Matthew 25 Jesus was speaking to the WISE and the PRODUCTIVE. He instructed them to look after those in need. Because the WISE and PRODUCTIVE would help the needy to become WISE and PRODUCTIVE not just lazy sloths waiting for a handout. Or perhaps you believe it is the mission of the Church blindly feed the poor and imprisoned and never demand they come to accept the teachings of Christ and His Church.

Matthew 20 The vineyard owner negotiated wages with each laborer. The free market at work again. Matthew 20:15 Don’t I have the right to do what I want with my own money?

1 Timothy 5:8 But if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel.

Every Catholic entering the debate has no doubt read Pope Leo XIII’s Rerum Novarum and they should, but how many have read his other encyclical that forms an essential foundation and context for Rerum?

Every Catholic today should read Quod Apostolici Muneris (AKA “On the Evils of Socialism”, December 28, 1878) and be wholly unafraid to vociferously condemn socialism in all its guises, iterations and costumes.

There is so much wrong with what Reno says and with distibutism that it would take a couple of books to address it all. Some major items:

1. What’s the point of having a science of economics if people like Reno feel free to completely ignore it? Would he do the same thing with medicine, physics or any other science? The main argument against Reno and distributism is that it completely ignores the field of economics while making pronouncements about it.

2. The notion that capitalism can make people evil contradicts historical Christian theology. It is the fabrication of atheist socialists. Greed and envy are part of human nature from the Fall. That is Christian theology. Capitalism cannot make people greedy or envy. Neither can socialism or distributism improve human nature. That is another fallacy of atheistic socialism. Only the Holy Spirit can do that. What Reno laments is the waning of Christianity, not anything to do with capitalism. Reno needs to learn to think like a Christian theologian.

3. Reno and distributists are guilty of the post hoc fallacy. To understand why the would have to learn some economics and economic history, but they appear willing to go to any length to avoid learning anything about those fields.

I sympathize with the distributist position, but I just can’t see how it would work in reality. Everyone would have to develop the skills and have the resources to be self-sufficient while accustoming themselves to far less luxury. Belloc and some others tried to start the Free Land movement in England, encouraging factory workers to start a farm on some unused piece of land and create their own goods to trade with other likeminded homestead owners. Yes, people would work for themselves, free of management, heavy machinery, and consumer demands; but they would have to work much harder, earn much less, and rely heavily on the kindness of their next-door neighbors.

Roger, in the comment above, is right to say that Reno et al. wrongly blame Capitalism for moral and cultural problems. This makes no sense. Because it makes people richer and more productive? Because it lowers the costs of goods while improving the quality? Because it transforms labor into something that transcends the drudgery of the farm and factory? The decline of Christian values stem from the breakdown of the family and the failure of schools and churches to instill character and virtue in the population. Calling for more government will do nothing but make people poorer and less equipped to fix these problems.

Benedict,
And the breakdown of the family and failure of schools and churches came from Americans embracing the liberal “Christianity” that came out of Germany in the mid-1800s and denied the truth of the Bible and the deity of Christ. That did not come from the Reformation or capitalism.

Darren,
“Capitalism is founded on the principles individual while Socialism is founded upon the principles of the state. Distributism is founded upon the principles of the family.”

Actually, Chesterton and Belloc did not invent distributism. It came from socialists and is nothing but a variety of socialism. It advocates a return to the guild system of the middle ages that kept Europe poor for centuries.

The principles of capitalism actually came from the Catholic theologians at the University of Salamanca, Spain in the 16th century. Protestant nations embraced them while Catholics rejected them. Protestant nations became rich while Catholic ones wallowed in miserable poverty for centuries until they finally came around.

Without going into a long dissection of this very well written article, I would just note that gospel parables note both increasing the size of the pie as well as distributing it according to the norms of charity. Today’s distributionists have very little to offer on the subject of increase and possibly should refrain from comment on economics until they have greater familiarity with the subject. Obviously, economic activity is a human thing and as such, will not be perfectly carried out, but a bit more effort on what experience has taught us does work, might be beneficial.

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